Camera+ sells a million copies and earns a million dollars (and some musings/rantings on the mobile industry)

We have big cause for celebration here today as we’ve sold our millionth copy of our mega-hit iPhone app, Camera+, and we’ve earned over a million dollars with the app. Revenues are after Apple’s cut and include sales of the in-app purchase of our recently introduced “I ♥ Analog” effects pack.

The state of the mobile market

To say the least, the mobile market is pretty chaotic at the moment. Apple and Google are jockeying for position to be the dominant player in the market and there’s no clear indicator of who will actually come out on top, if anyone will at all.

There’s a huge emphasis on pure numbers in almost every respect to show which platform is the bigger one… number of “devices activated” (since when did this become a better metric than devices sold?), number of apps available for each platform, number of apps downloaded, etc.

VCs are making pretty ridiculous moves where they’re literally throwing millions of dollars at half-baked ideas that have little chance at making enough of a return to justify their investments. We’re getting hit-up by these VCs more so than ever now and we’re being “courted” by various entities (there was even a strange rumor making the rounds recently that Apple was in the process of acquiring us, but I’ll tell you first-hand that nothing could’ve been further from the truth). There’s this whole air of desperation and urgency running rampant in the industry that’s making the bubble of the early 2000s look sane.

And whereas the dawn of the App Store triggered a big money-grab, the evolution of the industry has now triggered a much bigger “market-grab”. I’m finding the whole thing to be an odd combination of disturbing, annoying, and fascinating. It all seems so ludicrous, especially when you’re right in the middle of it.

Mobile business models

Investors are pushing the free, ad-driven model… and they’re pushing it pretty damn hard. VC Fred Anderson is betting that the mobile industry is destined to follow the web industry, where content is generally free and supported via ads. While it’s easy to picture this happening, I think Fred’s wrong here and that paid apps will continue to play a huge part in mobile economics in the long run…

Numbers for free apps aren’t nearly as impressive as the press is making it sound. The recent darling of Silicon Valley and one of our competitors, Instagram, has been lauded for getting one million downloads of the app in 10 weeks. But in reality, this number is pretty tiny compared to what high-ranking free apps are doing on a daily basis.

For example, the Facebook app, which usually isn’t even in the top 10, will typically get a million new users every week or so, and these are active users, not just downloads. In addition, free downloads are typically an order of magnitude higher than comparable paid apps so you’d actually need about 10 million free downloads to be in the same league with a paid app that’s gotten a million. Moreover, studies have shown that free apps are often basically throwaways… a somewhat shocking figure is that only 20% of free apps are actually used the day after they’re downloaded and after a few weeks, most free apps cease to be used at all.

But even ignoring the fact that ad-based business models typically aren’t nearly as effective as paid models, the biggest reason that I don’t see mobile economics driving toward web economics is because “micropayments” have finally become a reality. For as long as I can remember the web existing, there’s been talk of micropayments being the savior for content providers who wanted to generate revenue without having to resort to ads. Micropayments were originally envisioned as being on the order of a few cents per transaction and in the late 90s, there was even a World Wide Web Consortium proposal to make them an official part of the HTML spec. But for various reasons, it never actually materialized and the efforts were abandoned. And as I’m sure you’re well aware, ads simply drive the web as far as content provider revenues go.

Fast-forward to 2003 and Apple incorporating music purchasing into iTunes. In its 7.5 years of existence, Apple’s managed to grow its number of users to several hundred million and many of these users have iTunes Store accounts, complete with their credit card tied to the account. It’s basically become the de-facto standard for micropayments and its impulse-buy factor is one of the most significant reasons that the App Store has become so wildly successful as it’s a dead-easy process to buy very low-cost apps on your iPhone.

But on the contrary, Google’s lack of an effective equivalent on the Android side of things is one of the biggest reasons that’s keeping the market for paid apps down over there. Google could significantly improve things there, but the reality is that first and foremost, they’re in business to sell ads so they seem to have little interest in doing so. For them, all that matters is that they get as many people as possible using their free mobile OS and delivering as many targeted ads as possible to those people. It’s a radically different business model than Apple’s to say the least.

In the end, I think that both Apple’s and Google’s models will thrive and there won’t be a clear-cut winner. They’re ultimately two completely different markets, targeted toward two different kinds of users… and two different kinds of developers.

What’s this all mean for us?

Basically, we’re sticking with exactly what we’ve done so far… we’ll continue to create high-quality paid apps with no ads, exclusively for iOS. We’ll be going down this path until we have a truly compelling reason to even consider any other platform. And in reality, depending on how things ultimately shake out in the mobile arena, there’s the possibility that we’ll always be exclusively iOS. I personally wouldn’t mind that one bit.

For developers to truly be effective, they need to be passionate about the platforms they’re developing for. For our team at tap tap tap, the only platform that we collectively have passion for at this point is iOS.

One of the biggest differences between us and some of the other players in this market is that we didn’t create this business to quickly flip it, so we get to do things exactly the way we want to. This means that we have to make very few compromises, if any, thankfully. And you, as our customers, win because of this. Just imagine Camera+ with ads in it and I’m sure you’ll get exactly what I’m saying.

What’s next for Camera+?

We have a team of several of the most talented people in the industry working harder than ever to bring you many, many cool new features and improvements to Camera+. We’re extremely dedicated to making the best camera app for iPhone even better. While we’re not showing our hand just yet, I promise you that you’re going to love what we’re cooking-up for you.

We’ve been creating top-notch apps since the App Store first opened. Our apps are used by literally tens of millions of people in all corners of the world. A few of our favorite and most popular apps we’ve created are:

Camera+ replaced the default camera app on my iPhone long ago. It’s even better today than it was then. I’m glad you’re going to concentrate on IOS and keep away from the ad supported model. I really can’t understand how people can put up with the distraction of ads in webpages or apps. Free is no substitute for better user experience.

I love hearing about how much money you guys make after screwing us over for 3 months when the app was rejected and we (to this day) still don’t have an explanation of what you were thinking (only days after basically calling developers who do the very same thing ‘morons’). Awesome.

Not the first time these arguments are heard. Can’t help but agree though.

As for Camera+’s development: I’m hoping for video and HDR so I can really replace the default camera app. When wanting to record a moment I’m falling back to the default app often now because everything is possible there. When using Camera+ I have to stop and think first if it’s the best choice..

It’s funny how instagram has such wide praise, as it’s pretty crap & viewing an image on the instagram site is such an anti-climax. It’s only good for the Tumblr account link up. I would love to post from Camera+ to Tumblr

I had given up on Camera+ with the twitter keyboard bug, I had even begun to write the tweet as a message and then copy and paste it in. So I was completely over the moon when the new update brought the lovely analog filters and bug fixes.

I have had followers on twitter requesting prints of my Camera+ photos that’s the quality of the product you guys designed.

Fantastic blog post. As a fellow app developer, we struggle with the free, freemium, and paid model every day. As we get closer to product release, we debate our economic model on a daily basis. Thank you! Will be following your blog and will also be buying the app!

Hi
Happy its going this well for you. But my question is. With all this great venue shouldn’t you guys be able to get video and real HDR function into the app.
The top developers you are talking about are they not that good at what they do so this could be fixed.
And to make the saving time faster should be easy. Or?!?

PLEASE add an option to save pics in the camera roll. It’s so frustrating when camera apps save pics to different places. I’ll plug in my iPhone to download pics to my Mac, but they’re not there. “What the heck?” Oh, yeah. The pics are in an app lightbox instead of the camera roll. It drives me crazy.

I LOVE so much about Camera+ but I end up using ProCamera instead because I get frustrated by not having pics where they belong.

I must add that no app does a better job of tap for exposure than Camera+. It’s such a small detail, but it’s so well done. Tap To Focus and the secondary Tap For Exposure… Love it.

Another suggestion would be to add another slider in the Cross Process page that would change the actual color spectrum. We could get more combinations of Cross Processing colors that way. The current slider mainly leaves the color as it and sat/desat’s it. Any chance you could do that? Thanks again!!